Domestic Equity - Fidelity Investments

Domestic EquityFundamentals for investors

FIDELITY INSTITUTIONALSM

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Not FDIC Insured • May Lose Value • No Bank Guarantee

Equity mutual funds provide growth potential often necessary

for you to achieve your long-term investment goals. And, if you

don’t own equities, your portfolio may be missing out.

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Stick with stocks for long-term growth potential.

The market doesn’t go up in a straight line. Corrections and bear markets are normal.

The challenge for investors is to ride out setbacks and remember that over time, the

market has gone up.

Opportunities for Building WealthHistorically, equities have been one of the best ways to build wealth, outpacing bonds or short-term investments, albeit with greater price volatility. Yet many investors are wary of equities, either underinvesting in the asset class or jumping in and out of the market—often at the wrong time. In either case, investors may be missing opportunities.

Understanding equities can help you maintain an appropriate exposure in your portfolio and help you achieve your long-term investment goals.

EQUITIES: MORE GROWTH THAN BONDS OR CASH OVER THE LONG TERM

– Stocks– Bonds– 30-Day T-Bill– Inflation

Morningstar, as of 12/31/20. Hypothetical growth of $10,000. Bonds are represented by the IA SBBI U.S. Intermediate-Term Government Bond Index. IA SBBI U.S. Intermediate-Term Government Bond Index is a custom index designed to measure the performance of intermediate-term U.S. government bonds. Inflation is measured by the Consumer Price Index, an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation. 30-day Treasury Bills are represented by the IA SBBI U.S. 30-day Treasury Bill index, a custom unmanaged index designed to measure the performance of U.S. 30-day Treasury Bills. Stocks are represented by the S&P 500 index, a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.

$100,000

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$200,000

$700,000

$600,000

$500,000

$400,000

$300,000

$800,000

12/80 12/85 12/90 12/95 12/00 12/05 12/10 12/15 12/20

$900,000

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Equities and Equity Mutual Funds—How They WorkEquities—also known as stocks—represent ownership in a public company. When you invest in equities you can benefit from dividends, a portion of the company’s profits, and capital appreciation when the price of a company’s stock rises. Of course, not all companies pay dividends, and stock prices may decline as well.

Equity mutual funds offer a simple way to invest in stocks, allowing you to pool your money with other investors’ money. The price of the mutual fund is its net asset value (NAV). Like the price of a stock, the NAV fluctuates daily based on the value of the securities in the fund. Investors in an equity mutual fund do not actually own the securities; they own shares in the fund itself.

Diversification does not ensure a profit or guarantee against a loss.

Equity mutual funds can be a smart way to invest because you get:

Diversification

One share in a mutual fund could equal an investment in hundreds of companies. While diversification does not ensure a profit or guarantee against a loss, this diversification can reduce the risk of a loss in any one security from hurting your investment as a whole.

Professional management

Fund managers have the experience and resources to research companies, industries, the markets, and the economy when deciding which stocks to buy or sell.

Liquidity and convenience

Mutual funds allow you to buy or sell fund shares using the NAV at the market close. You can also automatically reinvest income from dividends and capital gains, if any, back into the fund.

It’s important to know that some funds charge fees when you buy or sell shares, and all funds charge management fees that cover the expenses incurred by the fund. Fees can impact a fund’s performance.

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Equity Fund CategoriesEquity mutual funds are often categorized by the size, or market capitalization, of the companies that the fund invests in.

Large Cap Companies Mid Cap Companies Small Cap Companies

Market cap: $10 billion or more

Stage: Large cap firms often have a reputation for producing quality goods and services and steady growth, and may also have a history of consistent dividend payments.

Market cap: $2 billion to $10 billion

Stage: Typically, these are established companies experiencing or expected to experience rapid growth.

Market cap: $300 million to $2 billion

Stage: Young companies that can be more sensitive to an upturn or a downturn.

Less Risk More Risk Less Growth More Growth

MARKET CAPITALIZATION IS THE VALUE OF ALL OF A COMPANY’S SHARES OF STOCKS.

Outstanding Shares x Stock Price = Market Cap

For example, a company with 20 million shares

selling at $50 a share

would have a market cap of $1 billion.

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Less Risk More Risk Less Growth Potential More Growth Potential

Value Core Growth Capital Appreciation

Value funds typically invest in companies whose stock prices don’t necessarily reflect their long-term worth. Ideally, stock prices will appreciate over time as the market recognizes the company’s worth and earnings potential.

Core funds usually use a blended approach—investing in both value and growth stocks—seeking attractive dividend income and slow but steady growth. The goal is some appreciation potential.

Growth funds invest in companies with faster-than-average sales and earnings growth. These companies often reinvest profits back into the business and range from fast growers to mature, stable growers. Typically, the market has rewarded growth investors with higher stock values.

Capital appreciation funds invest in companies with the potential for dramatic growth and rapidly appreciating share prices. The managers often have the flexibility to move around the market and exploit opportunities wherever they arise.

Who should invest?Conservative investors seeking low volatility and income

Historically, value stocks have been less volatile than the market. In general these stocks come from mature companies that use their earnings to pay dividends, helping investors increase their wealth conservatively.

Investors seeking a stable base for their portfolio

Core funds typically have provided more capital appreciation potential than value funds and lower volatility than growth funds.

Risk-tolerant investors seeking solid growth potential

Growth companies have provided greater capital appreciation than value funds, albeit with greater volatility.

Investors seeking to grow their assets quickly who can tolerate high volatility

Companies with the potential to grow the fastest have historically provided high capital appreciation potential with more volatility than growth funds.

What’s the performance?Value funds often have trailed the market when stock prices were rising, but have lost less value when markets were declining.

Core funds typically have trended—risen and declined—with the market.

Growth funds have tended to do better than the overall market when stock prices were rising but underperformed the market when stock prices declined.

Capital appreciation funds have tended to outperform the market and growth funds when markets were rising and have lost more value when prices declined.

Which Equity Funds Are Right for You? Equity mutual funds employ a variety of approaches. Understanding these approaches can help you and your advisor select funds appropriate for your goals.

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Less Risk More Risk Less Growth Potential More Growth Potential

Value Core Growth Capital Appreciation

Value funds typically invest in companies whose stock prices don’t necessarily reflect their long-term worth. Ideally, stock prices will appreciate over time as the market recognizes the company’s worth and earnings potential.

Core funds usually use a blended approach—investing in both value and growth stocks—seeking attractive dividend income and slow but steady growth. The goal is some appreciation potential.

Growth funds invest in companies with faster-than-average sales and earnings growth. These companies often reinvest profits back into the business and range from fast growers to mature, stable growers. Typically, the market has rewarded growth investors with higher stock values.

Capital appreciation funds invest in companies with the potential for dramatic growth and rapidly appreciating share prices. The managers often have the flexibility to move around the market and exploit opportunities wherever they arise.

Who should invest?Conservative investors seeking low volatility and income

Historically, value stocks have been less volatile than the market. In general these stocks come from mature companies that use their earnings to pay dividends, helping investors increase their wealth conservatively.

Investors seeking a stable base for their portfolio

Core funds typically have provided more capital appreciation potential than value funds and lower volatility than growth funds.

Risk-tolerant investors seeking solid growth potential

Growth companies have provided greater capital appreciation than value funds, albeit with greater volatility.

Investors seeking to grow their assets quickly who can tolerate high volatility

Companies with the potential to grow the fastest have historically provided high capital appreciation potential with more volatility than growth funds.

What’s the performance?Value funds often have trailed the market when stock prices were rising, but have lost less value when markets were declining.

Core funds typically have trended—risen and declined—with the market.

Growth funds have tended to do better than the overall market when stock prices were rising but underperformed the market when stock prices declined.

Capital appreciation funds have tended to outperform the market and growth funds when markets were rising and have lost more value when prices declined.

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Combinations May Create a Smoother RideOver time, diversifying across different types of mutual funds can help you manage risk and potentially boost returns. While diversification can’t prevent a loss, it can temper volatility and help you avoid the emotional ups and downs of investing.

Data from Morningstar, as of 12/31/20. The Diversified Portfolio is an equal-weighted composite of the average annual returns of the market categories (indices) shown above and does not represent any specific index. It is not possible to invest directly in an index. All market indices are unmanaged.

YOU CAN’T PREDICT THE BEST AND WORST PERFORMERS. HOWEVER, DIVERSIFYING MAY HELP KEEP YOUR PORTFOLIO FROM COMING IN LAST.Annual returns of key market categories, 2011–2020

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Large Cap Growth

4.7%

Mid Cap Value18.5%

Small Cap Growth43.3%

Large Cap Growth14.9%

Large Cap Growth

5.5%

Small Cap Value31.7%


Large Cap Growth

0.0%

Large Cap Value31.9%


Large Cap2.1%


Small Cap38.8%

Large Cap13.7%

Mid Cap Growth

2.0%

Mid Cap Value26.5%


Large Cap–4.4%

Large Cap31.5%


Large Cap Value–0.5%

Mid Cap17.9%

Diversified Portfolio

34.9%


Large Cap1.4%

Small Cap21.3%

Large Cap21.8%


–8.9%


Mid Cap Growth22.8%

Mid Cap Growth–0.9%



Mid Cap Value12.1%

Small Cap Growth–1.4%

Mid Cap20.7%

Mid Cap Growth19.9%



Small Cap20.0%


–1.3%

Mid Cap Growth17.3%

Mid Cap Value34.3%

Mid Cap9.8%


–1.8%


18.1%


17.5%



27.7%

Large Cap18.4%

Mid Cap–1.7%


16.8%

Mid Cap33.5%


9.5%

Mid Cap–2.2%


Mid Cap16.2%

Mid Cap Growth–10.3%

Mid Cap Growth26.3%


17.0%

Mid Cap Value–2.4%

Small Cap16.3%


Mid Cap Growth

7.6%


Mid Cap Growth14.8%


Small Cap–11.0%

Mid Cap26.2%

Mid Cap13.7%


Large Cap16.0%

Mid Cap Growth32.8%

Small Cap Growth

5.6%

Small Cap–4.4%

Large Cap12.0%

Small Cap14.6%

Mid Cap–11.1%

Mid Cap Value26.1%

Small Cap Value4.6%

Small Cap–4.2%


Large Cap32.4%

Small Cap4.9%

Mid Cap Value–6.7%


Mid Cap Value12.3%

Mid Cap Value

–11.9%

Small Cap25.5%

Mid Cap Value3.7%

Small Cap Value–5.5%



Small Cap Value4.2%

Small Cap Value–7.5%

Large Cap Growth

6.9%

Small Cap Value7.8%

Small Cap Value

–12.9%


Large Cap Value1.4%

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Choose a Mix and Develop a PlanYour advisor can help you establish an investing plan with a blend of equity funds that aligns with your goals, time horizon, and risk tolerance. Having a plan can help you weather market declines and take some of the emotion out of investing. Remember that achieving your goals can come down to four simple steps:

• Choosing investments that fit

• Investing regularly

• Diversifying your equity investments

• Sticking with your plan

Bailing out of the market may lock in losses and can prevent you from profiting from gains.

STICKING WITH YOUR EQUITY PLAN HAS PAID OFF: HISTORICALLY BULLS FOLLOW BEARS

As of 12/31/20. Data from Morningstar. Market performance is represented by the S&P 500®. Bear markets are defined as a 10% or more decline from the previous peak, while bull markets are defined as the bottom of the bear market to the subsequent peak. Performance data shown represents past performance and is no guarantee of future results. It is not possible to invest directly in an index. All market indices are unmanaged.

BEAR MARKETS BULL MARKETS

Dates Cumulative Returns Cumulative Returns Dates

9/1987–11/1987 12/1987–5/1990

6/1990–10/1990

11/1990–6/1998

7/1998–8/1998

9/1998–8/2000

9/2000–9/2002

10/2002–10/2007

11/2007–2/2009

3/2009–4/2010

5/2010–8/2010

9/2010–4/2011

5/2011–9/2011

10/2018–12/2018

10/2011–9/2018

1/2019–12/2019

-100% -50% 0% 50% 100% 150% 200% 250% 300% 350% 400%

1/2020–3/2020 4/2020–?

-29.6% 71.5%

-14.7% 355.1%

-15.4% 62.6%

-44.7% 108.4%

-50.9% 65.5%

-10.9% 31.6%

31.5%

-16.3%

-13.5%

47.3% (through 12/31/20)-19.6%

198.5%

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Placing the Interests of Our Customers FirstFidelity is dedicated to helping advisors and their clients achieve their investment goals.

Products

Whether you are hoping to build a down payment for a house, send a child to college, or invest for retirement, Fidelity has an equity mutual fund that may align with your goals, time horizon, and risk tolerance.

Research

Fidelity’s research is strictly for the benefit of our shareholders. We do not sell our research.

Heritage

Fidelity is privately held and driven by a long-term vision, resulting in an investment focus that seeks consistent and strong performance.

1 Fidelity Management & Research Company, and Fidelity Institutional Asset Management as of 12/31/20. Data is unaudited. Research figures reflect the resources of Fidelity Management & Research Company a U.S. company, and its subsidiaries. Research professionals include both analysts and associates.

Over 30 domestic equity mutual funds with defined styles, market capitalizations, and objectives

More than 70 years of experience managing money, and more than $3.6 trillion in assets under management1

Over 240 equity research professionals and portfolio managers who analyze companies and industries to find opportunities and preserve value1

Information provided in this document is for informational and educational purposes only. To the extent any investment information in this material is deemed to be a recommendation, it is not meant to be impartial investment advice or advice in a fiduciary capacity and is not intended to be used as a primary basis for you or your client’s investment decisions. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in this material because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.Bonds are represented by the IA SBBI U.S. Intermediate-Term Government Bond Index, a custom index designed to measure the performance of intermediate-term U.S. government bonds. Inflation is measured by the Consumer Price Index, an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation. 30-day Treasury Bills are represented by the IA SBBI U.S. 30-day Treasury Bill Index, a custom unmanaged index designed to measure the performance of U.S 30-day Treasury Bills. Large cap stocks are represented by the S&P 500 index, a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity perfor-mance. Large cap growth stocks are represented by the S&P 500 Growth Index, a market capitalization-weighted subset of the S&P 500 that exhibits growth characteristics. Large cap value stocks are represented by the S&P 500 Value Index, a market capitalization-weighted subset of the S&P 500 that exhibits value characteristics. Mid cap stocks are represented by the S&P MidCap 400 Index, a market capitalization-weighted index of 400 mid cap stocks of U.S. companies chosen for market size, liquidity, and industry group representation. Mid cap growth stocks are represented by the S&P MidCap 400 Growth Index, a market capitalization-weighted subset of the S&P MidCap 400 that exhibits growth characteristics. Mid cap value stocks are represented by the S&P MidCap 400 Value Index, a market capitalization-weighted subset of the S&P MidCap 400 that exhibits value characteristics. Small cap stocks are represented by the Russell 2000 Index, a market capitalization-weighted index designed to measure the performance of the small cap segment of the U.S. equity market. It includes approximately 2,000 of the smallest securities in the Russell 3000® Index. Small cap value stocks are represented by the Russell 2000 Value Index, a market capitalization-weighted index designed to measure the performance of the small cap value segment of the Russell 2000 Index. It includes companies with lower price-to-book ratios and lower forecasted growth rates. Small cap growth stocks are represented by the Russell 2000 Growth Index, a market capitalization-weighted index designed to measure the performance of the small cap growth segment of the Russell 2000 Index and includes companies with higher price-to-book ratios and higher forecasted growth rates.

All market indices are unmanaged. It is not possible to invest directly in an index. • Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk. • In general the bond market is volatile, and fixed income securities carry interest rate risk. As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities. Fixed income securities also carry inflation, credit, and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible. Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. • Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risk. • Growth stocks can perform differently from other types of stocks and the market as a whole and can be more volatile than other types of stocks. • Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time. • The securities of smaller, less well-known companies can be more volatile than those of larger companies. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. • Some funds may have additional volatility because they can invest a significant portion of assets in securities of a small number of individual issuers. The value of securities of companies involved in a special situation event can perform differently from other types of stocks and the market as a whole and can be more volatile than other types of stocks. • Leverage can magnify the impact of adverse issuer, political, regulatory, market, or economic developments on a company. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Although the companies that Leveraged Company Stock Fund invests in may be highly leveraged, the fund itself does not use leverage as an investment strategy.

Not NCUA or NCUSIF insured. May lose value. No credit union guarantee.

Third-party trademarks and service marks are the property of their respective owners. All other trademarks and service marks are the property of FMR LLC or an affiliated company.

Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Consult your investment professional or visit i.fidelity.com for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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Domestic Equity - Fidelity Investments

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